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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Fracking Equipment Shortage Adds To Shale Drillers' Woes

  • Supply bottlenecks and materials price inflation have been hampering growth in the U.S. shale patch.
  • Reuters: demand for fracking equipment currently exceeds supply.
  • Halliburton warned earlier this month that "supply chain bottlenecks, even for diesel fleets, make it almost impossible to add incremental capacity this year."

Materials price inflation and a labor shortage have been hampering growth in the U.S. shale oil industry, and now it has also slipped into a fracking equipment shortage.

Reuters reported this week that demand for fracking equipment currently exceeds supply, which means one more obstacle to boosting production in line with demand projections.

The report cited the chief executive of NexTier Oilfield Solutions, a fracking company, as saying, "Availability of frac fleets is one of main bottlenecks impeding oil and natural as production growth for the next 18 months."

This adds to previously identified shortages of things like frac sand and steel piping used for oil wells, and it could last for several years, according to NexTier Oilfield Solutions' Robert Drummond.

Supply chains are still damaged from the pandemic disruptions, and companies are still being cautious with their capital allocations, he noted as reasons for the outlook. Indeed, Halliburton warned earlier this month that "supply chain bottlenecks, even for diesel fleets, make it almost impossible to add incremental capacity this year."

What all this means is the growth in U.S. crude oil production would be constrained despite calls from the federal government for a fast ramp-up in output.

According to the latest data from the U.S. Energy Information Administration, production averaged 12.1 million barrels daily during the week to July 22. That was up from 11.9 million bpd a week earlier and 11.2 million bpd a year earlier. It was still lower than the record 12.3 million bpd oil companies in the U.S. produced in 2019.

The Energy Information Administration expects the average daily production for this year to be around 11.9 million bpd. This means that production will not be growing much from current levels, not least because, per Halliburton and Liberty Oilfield Services, the equipment market was nearing full utilization.

By Irina Slav for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on July 28 2022 said:
    More and more excuses why US shale oil production has been stagnant if not declining since the COVID pandemic in 2020. The list of the excuses is getting longer by the day and now includes prices, supply bottlenecks, materials price inflation, labour shortage, shortages of fracking sand and steel piping used in oil wells and now a fracking equipment shortage.

    The truth of the matter is that US shale production is a spent force. The sweet and lucrative spots in the shale plays have already been exhausted forcing drillers to move to poorer and costlier spots thus leading to rising costs of production and declining production.

    Against this background, claims by the U.S. Energy Information Administration (EIA) that production averaged 12.1 million barrels a day (mbd) during the week to July 22 must be taken not with a pinch of salt but with tons of salt. My estimate of US production is around 10.00 mbd or slightly under.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

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